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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Short answer: Withdrawals from a traditional IRA are generally included in federal ordinary income, although any portion attributable to nondeductible contributions may be tax-free. Roth IRA contributions are made with after-tax money, so returning regular contributions is generally not taxable; Roth earnings become tax-free only when the distribution meets the IRS five-tax-year and qualifying-event rules. Traditional IRA owners generally must begin required minimum distributions (RMDs) for the year they reach 73, while the original owner of a Roth IRA has no lifetime RMD requirement. The right withdrawal order depends on your basis, other income, age, beneficiary status and timing. The rules below are federal rules; they do not determine your state tax or personal planning result.
For the governing details, see the IRS Publication 590-B (2025), the IRS RMD guidance and Topic No. 451.
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Roth and traditional IRA withdrawals at a glance
| Question | Traditional IRA | Roth IRA |
|---|---|---|
| How is a typical owner withdrawal taxed? | Generally ordinary income. The taxable amount can be reduced by the portion representing nondeductible basis. | Regular contributions are generally returned tax-free. Earnings are tax-free only for a qualified distribution. |
| What changes the taxable amount? | After-tax (nondeductible) contributions require a basis calculation; the distribution is not automatically 100% taxable. | The IRS qualification and ordering rules determine whether money is treated as contributions or earnings and whether earnings qualify for tax-free treatment. |
| When do lifetime RMDs begin for the original owner? | Generally for the year the owner reaches age 73. The first distribution may be delayed until April 1 of the following year. | No lifetime RMDs for the original owner while alive. |
| What if money is taken before age 59½? | A 10% additional tax generally applies unless an exception applies, and ordinary-income tax is a separate question. | The 10% additional tax and income-tax treatment depend on what part of the distribution is being taken and whether an exception or qualified-distribution rule applies. |
| What if the account is inherited? | Beneficiary RMD schedules differ from original-owner rules. | Beneficiaries also follow separate distribution rules; the original-owner lifetime exemption does not answer an inherited-account question. |
This table is a starting map, not a withdrawal recommendation. A distribution can involve more than one rule at the same time: for example, age, basis, Roth qualification and RMD status may all matter.
How traditional IRA withdrawals are taxed
Most distributions are ordinary income
Money withdrawn from a traditional IRA is generally included in federal ordinary income for the year of distribution. That income can affect your marginal tax bracket and other income-based calculations. The fact that money is used for living expenses, medical bills or another purpose does not by itself make the distribution tax-free.
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Nondeductible contributions create tax basis
If you made traditional IRA contributions that were not deductible, those contributions are after-tax basis. A distribution that includes basis is not fully taxable. Instead, the IRS basis-allocation rules determine the taxable and nontaxable portions. You cannot simply label the next withdrawal as a return of your after-tax dollars while leaving all other IRA money taxable.
Illustration: Assume, solely as an example, that all of your traditional, SEP and SIMPLE IRAs together total $100,000 at the time of a $10,000 withdrawal, and that your documented nondeductible basis is $20,000. If the applicable calculation produces a 20% basis share, $2,000 of the withdrawal would be nontaxable and $8,000 would generally be ordinary income. Your actual percentage depends on the IRS calculation and your account balances; the example is not a personal tax computation.
Form 8606 and records matter
The IRS points taxpayers with nondeductible contributions and certain distributions to Form 8606. Keep records showing the nondeductible contribution reported in each relevant year, because missing basis documentation can cause you to treat too much of a later distribution as taxable. Use the current Form 8606 and its instructions for the filing year and transaction rather than relying on an old worksheet.
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Contributions and earnings are different layers
Roth IRA contributions are not deductible when made. When a distribution returns regular contributions, that contribution amount is generally not included in income. Earnings are a different layer: they are tax-free only if the distribution is qualified under the IRS rules.
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Qualified distributions require a five-tax-year period and a qualifying event
The IRS describes a qualified Roth distribution as one that satisfies the applicable five-tax-year requirement and a qualifying event. Reaching age 59½ is a common qualifying event. Because both elements matter, saying that every Roth withdrawal is tax-free is incorrect. A person who has reached 59½ may still need to satisfy the applicable five-tax-year period for earnings to receive qualified-distribution treatment.
Nonqualified distributions need an ordering and exception analysis
When a Roth distribution is not qualified, IRS ordering rules determine whether the payment is treated as a return of contributions or as earnings. Any earnings portion that does not qualify may be included in income, and the 10% additional tax may apply unless an exception is available. Certain Roth transactions also require Form 8606, so check the current instructions for the type of distribution involved.
Required minimum distributions in retirement
Traditional IRA owners generally start at age 73
Under the current federal rule described by the IRS, an original traditional IRA owner generally must take an RMD for the year the owner reaches age 73. The first RMD can be postponed until April 1 of the following year. That postponement does not erase the first-year obligation: the first-year amount remains due by April 1, and the RMD for the following year is generally due by December 31 of that same calendar year.
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How an RMD is generally calculated
The RMD amount is generally based on the account balance at the end of the prior year divided by an applicable IRS life-expectancy factor. The factor depends on the circumstances specified in the IRS tables. An RMD is a minimum, not a cap; you may withdraw more, but the additional amount is not a substitute for a later year’s minimum.
Original Roth owners have no lifetime RMDs
The original owner of a Roth IRA is not required to take lifetime RMDs while alive. That allows the owner to leave assets invested, take only the amount needed, or preserve the account for a later beneficiary, subject to the separate rules that apply after death.
Withdrawals before age 59½
The 10% additional tax is separate from income tax
The IRS generally imposes a 10% additional tax on an IRA distribution made before age 59½ unless an exception applies. For a traditional IRA, an amount can therefore be both ordinary income and subject to the additional tax. An exception to the 10% tax does not automatically make the distribution exempt from ordinary income.
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For a Roth IRA, the result depends on whether the payment is a return of regular contributions, a qualified distribution, or a nonqualified earnings distribution. The age test, five-tax-year requirement and any applicable exception must be analyzed together.
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Exceptions are fact-specific
Federal law contains exceptions to the 10% additional tax, but the available exception depends on the reason for the distribution and the documentation required. Do not treat the existence of an exception as a blanket permission to withdraw tax-free. Check the current IRS instructions for the filing year and the exact exception before taking the money.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Inherited IRAs are a separate case
Beneficiary rules replace the original-owner timeline
An inherited traditional or Roth IRA is governed by beneficiary distribution rules, not simply by the original owner’s age. The schedule can depend on the beneficiary category and on whether the owner died before or after the required beginning date.
The 10-year rule and eligible designated beneficiaries
IRS Publication 590-B describes a 10-year rule for many designated beneficiaries and exceptions for eligible designated beneficiaries. The details determine whether annual distributions are required, whether the account must be emptied by the end of the tenth year, or whether another schedule applies. An inherited Roth IRA can therefore have required distributions even though the original Roth owner had no lifetime RMDs.
Before withdrawing from an inherited account, identify the owner’s date of death, your beneficiary classification and the account type. Applying the original owner’s age-73 rule or the original Roth lifetime exemption without that information can produce a wrong deadline.
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Tradeoffs that influence a retirement withdrawal decision
Tax timing
A traditional IRA usually defers tax until money comes out, so withdrawals add to taxable income in the distribution year. A qualified Roth distribution generally removes both the contribution and qualifying earnings from federal income. The practical tradeoff is between paying tax under today’s rules and preserving future tax-free access, but no one can know a household’s future tax rate with certainty.
RMD pressure and control over taxable income
Traditional IRA RMDs can force taxable distributions even when you do not need the cash. A Roth IRA has no lifetime RMD for the original owner, which provides more control over the timing and size of owner withdrawals. That difference can matter when managing annual income, but the account choice also depends on how contributions were taxed and on the rules for eventual beneficiaries.
Basis complexity
Traditional IRAs with nondeductible contributions require basis tracking and an allocation calculation. A household that has never made nondeductible contributions generally has a simpler taxable-distribution calculation, while a household with mixed deductible and nondeductible money must preserve Form 8606 records and apply the IRS method.
Access before 59½
Retirees leaving work early should separate three questions: whether the distribution is income, whether the 10% additional tax applies, and whether a Roth payment is a contribution return or earnings. A plan that assumes all Roth money is immediately penalty-free or that an exception eliminates every tax can fail at filing time.
Legacy planning
An original Roth owner can leave the account untouched for life, while an inherited account follows beneficiary rules after death. A traditional IRA may create taxable income for a beneficiary when distributions are taken. Those differences can affect how much a household wants to spend, convert, or preserve, but the federal rules alone do not identify the best estate or withdrawal strategy.
A practical withdrawal checklist
- Confirm the account type and ownership. Determine whether the account is your own traditional IRA, your own Roth IRA, or an inherited account. Do not use original-owner rules for a beneficiary account.
- Check your age and the calendar year. Note whether you are under 59½, have reached 59½, or are in the year you reach 73. For a first traditional IRA RMD, decide whether taking it in the reaching-73 year or delaying until April 1 of the next year fits your income timing.
- Inventory traditional IRA basis. Gather prior Forms 8606 and identify nondeductible contributions. Include all traditional, SEP and SIMPLE IRA balances relevant to the IRS basis calculation.
- Classify the Roth dollars. Determine how much of the proposed payment is a return of regular contributions and whether the five-tax-year and qualifying-event requirements are satisfied for earnings.
- Separate ordinary income from the additional tax. Estimate the income-taxable amount first, then test the 10% additional-tax rule and any exception separately.
- Calculate required distributions. For a traditional IRA subject to an RMD, use the prior year-end balance and the applicable IRS life-expectancy factor. Take at least the required amount by the applicable deadline.
- Review beneficiary deadlines. For an inherited account, establish the beneficiary category and the owner’s date of death before deciding on a distribution schedule.
- Use current reporting instructions. Complete Form 8606 when its instructions call for basis or certain Roth-distribution reporting, and retain the supporting records.
- Check state and household effects. The federal rules do not resolve state income tax, withholding choices, interaction with other income or a couple’s best drawdown sequence. Consider those issues with a qualified tax professional before executing a large withdrawal.
Common mistakes to avoid
- Calling every traditional IRA withdrawal fully taxable. Nondeductible basis can make part of a distribution nontaxable.
- Calling every Roth withdrawal tax-free. Contributions and qualified earnings have different treatment, and the five-tax-year requirement still matters.
- Confusing an RMD deadline with a tax-free withdrawal. An RMD is a required amount to distribute; it is generally taxable for a traditional IRA owner unless basis changes the result.
- Forgetting the two-RMD possibility. Delaying the first RMD to April 1 can put that amount and the next year’s amount in the same calendar year.
- Applying the 10% exception as an income-tax exemption. The additional tax and ordinary-income rules are separate.
- Using the original owner’s rules for an inherited account. Beneficiary category and death-date facts can change the schedule.
- Losing basis records. Without accurate nondeductible-contribution records, a later distribution may be reported incorrectly.
What these rules can and cannot tell you
The federal framework establishes the account mechanics: traditional IRA distributions are generally ordinary income, Roth qualified distributions are tax-free, age 73 generally triggers traditional IRA owner RMDs, and the original Roth owner has no lifetime RMD. It does not establish whether you should spend taxable assets, traditional IRA money, Roth money or some combination first. That decision requires your actual basis, balances, other income, expected withdrawals, beneficiary plans, state of residence and tolerance for future tax uncertainty.
Use the IRS publications and current form instructions for the year of the transaction. If a withdrawal is large, occurs near an RMD deadline, involves nondeductible basis, or comes from an inherited account, verify the calculation before requesting the distribution.
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